Sunday, 14 October 2012

Remedies for the Unionized Wrongfully Dismissed

What is the appropriate remedy for a unionized employee wrongfully
dismissed from the federal government?

In the latest installment of Thu-Cùc Lâm’s legal saga, which
is a story that commences with her July 12, 2006 termination of employment from
the Public Health Agency of Canada (PHAC), the Public Service Labour Relations
Board provided its most recent answer to that question.

Background

Thu-Cùc Lâm (“the grievor”) was dismissed from her position
with the federal public service on July 12, 2006.

Adjudicator Pineau originally ruled that
it was a wrongful dismissal. However, Adjudicator Pineau refused to order Lâm's reinstatement. (2008 PSLRB 61).

Lâm applied
for judicial review of the decision on the ground that Adjudicator Pineau had
not allowed her to present her arguments on the issue of reinstatement. The Federal Court allowed the application for judicial
review in part (2009 FC 913) and ordered
that a hearing be scheduled to hear the parties on the issue of the appropriate
remedy.

Lâm appealed the Federal Court's decision. The Federal Court of Appeal set aside the
Federal Court’s decision and ordered that the case be referred back to Adjudicator
Pineau to decide the issue of the appropriate remedy (2010 FCA 222).

Adjudicator Pineau held a hearing on the issue of the
appropriate remedy. Given the testimonies and all the circumstances, she
decided that reinstating the grievor was not viable and that her reinstatement
had no reasonable chance of success (2011 PSLRB 137). Therefore, Adjudicator Pineau denied the
grievor’s request for reinstatement in her position, remained seized of the
case to determine an appropriate remedy and gave the parties 30 days following
the rendering of her decision to come to an agreement on the amount of
compensation.

Despite two extensions of the deadline and a mediation
session, the parties were unable to agree on an appropriate remedy. Thus, a
hearing was held, specifically to address the issue of the appropriate remedy
to compensate the grievor for the loss of her employment. This decision (i.e.
2012 PSLRB 96) deals only with the appropriate remedy for this case.

Facts

Lâm began working for the PHAC on April 14, 1998 as a
program consultant (PM‑04) and reached the top of the salary range for her
classification. She was dismissed on July 12, 2006. She had eight years and
three months of seniority on the day on which she was dismissed. She was
earning a salary of $61,047 plus benefits equal to 15% of her income. She paid
$3,288 per year toward the Public Service Pension Plan. She was 59 years old
when she was dismissed. After her dismissal, she decided to accept early
retirement from the public service, under which she receives a monthly income
that is indexed each year. She can pay to receive certain benefits that are
similar to those that she received as a public service employee

Arguments

Lâm argued that she was entitled to a full and complete
remedy as if she had been reinstated — that is, the full salary that she would
have received between the date of her dismissal and December 3, 2013. In other words,
she requests that she be paid the compensation that she would have received
until the age of her retirement. (Paragraph 8 of the decision.) Neither I nor
the adjudicator appears able to discern the significance of December 3, 2013;
December 3rd is not Lâm’s birthday.

The employer argued that labour adjudicators generally base
themselves on common law principles (see my comments about wrongful dismissal)
and that they do not make a distinction as to what is reasonable for a
unionized employee. The employer also argued that the remedy should not include
future losses. (Paragraph 17.)

Decision of the PSLRB

In reaching her decision Adjudicator Pineau expressly
endorsed most of the principles set out by Arbitrator Sims in Hay River Health and Social Services
Authority v. Public Service Alliance of Canada (2010), 201 L.A.C. (4th) 345.

In ruling that there is a difference between the unionized
and non-unionized work environment, Adjudicator Pineau held at paragraph 28 of
her reasons for decision that:

The justification for considering a distinct
compensation scheme for unionized employees lies in the loss of benefits
granted by a collective agreement. With few exceptions, an employee covered by
a collective agreement cannot be dismissed without proper and sufficient cause,
whereas a private-sector employee can be dismissed provided he or she receives
sufficient notice. Furthermore, the common law does not generally consider the
benefits that are specific to collective agreements, which include the
following: the right to be reinstated in the event of a wrongful dismissal,
representing greater job security; the role of seniority in professional development;
annual leave; benefits; severance pay; and the right to a pension, if
applicable.

However, Adjudicator Pineau later, at paragraph 35 of her
reasons, added that:

I conclude that the remedy in this case is more or less
the same whether I adopt the principles advanced by Adjudicator Sims or the
principles advanced by common law courts. If I adopt Adjudicator Sims’
reasoning, the requested remedy will necessarily be discounted by certain
contingencies. However, if I adopt the common law courts’ reasoning, I must
make an assessment that falls within the framework of reasonable notice. In
this case, either one leads to a similar conclusion with respect to the amount
to be paid to the grievor.

Adjudicator Pineau’s calculation of Lâm’s remedy is very
interesting, and requires a least two readings. Here it is in full:

48. Given that the grievor was close to retirement age when
she was dismissed and that she intended to finish her career with the public
service, I assess the grievor’s employment capital to be 6.5 years, or 78
months. However, I find that that employment capital must be discounted by 25%
based on the contingencies described earlier, which are risk factors related to
employment loss: a decision to change jobs, a decision to retire early, job
loss due to economic or technological reasons, compromised health, or unforeseeable
family circumstances.

49. I will now consider the grievor’s extensive disciplinary
record. I find that this factor is the most likely to compromise her chances of
maintaining long-term employment with the employer, given the nature of the
discipline involved. Before the events leading to her dismissal, the grievor
compiled a disciplinary record that included the following…

50. A grievance was filed about the 2-, 10- and 20-day
suspensions. Adjudicator Tessier rendered a decision on July 9, 2007 (2007
PSLRB 69) in which the disciplinary measures were upheld in full, and
consequently, they were still on her record at the time of her dismissal. In
line with the principle of progressive discipline, and independent of the
wrongful dismissal, the grievor was at risk of being dismissed if another
disciplinary incident occurred. Had she been reinstated, her record would have
remained active, and she would have continued to be at risk of dismissal for
another disciplinary incident.

51. Consequently, in addition to the 25% reduction mentioned
earlier, I find that the grievor’s
employment capital should be further discounted by 50% due to her extensive
disciplinary record. Therefore, I conclude that her employment capital of
6.5 years should be discounted by 75%. Accordingly, the appropriate
compensation amounts to 19.5 months of the grievor’s gross salary, calculated
according to the salary scale set out in the collective agreement effective on
her dismissal date.

52. Since the remedy being applied to the grievor is based
on the value of her loss of employment and not on the common law principle of
reasonable notice to seek other employment, I find that the obligation to
mitigate damages is not consistent with that principle, and I do not so order. [Emphasis
added.]

In the result the Board ordered the employer to pay an
amount equal to 19.5 months of gross salary, less applicable deductions,
calculated as of July 13, 2006.

Commentary

A small part of me is torn as to whether Adjudicator Pineau
really applied the approach in Hay River,
or whether she started from a figure based on common-law principles and then
worked backwards to find an approach that would arrive at a similar figure. I
guess it may not matter.

In general, I like Adjudicator Pineau's stated approach. But for Ms. Lâm’s extensive
discipline record, she would have received considerably more notice than she
ever would have under the common-law, an approach that would appear to
recognize the fundamental difference of the unionized work environment.

Those comments aside, given the path taken thus far on this
matter, a small part of me suspects that this is not the last that we will hear
about this matter.

--

As always, everyone’s situation is different. The above
is not intended to be legal advice for any particular situation and it is
always prudent to seek professional legal advice before taking any decisions on
one’s own case.

Sean Bawden is an Ottawa, Ontario employment lawyer and
wrongful dismissal lawyer. He tweets from @SeanBawden.